Automakers keen to set up base in Gujarat

Gujarat is rapidly emerging a viable destination for automakers keen on expanding capacities in India.

The State first hit the headlines when Tata Motors decided to relocate the Nano project here from Bengal. Till then, its prominent auto resident was General Motors which had set up base in Halol with its then local ally, Hindustan Motors. Atul Auto has, of course, been present in Rajkot for many years.

Gujarat was hardly on the radar when India threw open its gates to multinational car companies in the early 1990s. For that matter, its neighbour, Maharashtra also lost out the initial investment momentum of the 1990s to Tamil Nadu (Ford and Hyundai), Karnataka (Toyota and Volvo) and Uttar Pradesh (Daewoo and Honda). All it managed was a Peugeot which quickly wrapped up operations a couple of years later.

Maharashtra got its act together with an aggressive auto policy in the turn of the century which helped draw big players such as Volkswagen, Tata-Fiat, General Motors, Daimler and Mahindra-Navistar. By this time, the Uttarakhand government also got into the picture with its share of fiscal sops which attracted local players like Tata Motors, Mahindra & Mahindra, Bajaj Auto and Hero Honda.

Tamil Nadu continued to keep the tempo intact with big-ticket investments such as Renault-Nissan and BMW. Peugeot, likewise, is tipped to set up shop here though there has been no official confirmation yet.

Gujarat moved into the picture barely three years ago thanks largely to Bengal botching up the Nano project. The government wasted little time in offering Sanand as an alternative location to the Tatas. The plant was readied in no time and today, Maruti is close to finalising its own plant nearby.

Ford is, likewise, keen on Gujarat as its second home and a decision is likely to be finalised in the following days. Sources say Hyundai is also exploring the possibility and insist that there could be a surprise in the form of Peugeot too if everything goes according to plan.

Why this rush for Gujarat? For one thing, a whole lot of carmakers are keen on expanding capacities with an eye on export markets. Here is where Gujarat scores with its well developed port infrastructure. Two, there is an efficient bureaucracy in place which ensures that work gets done quickly and little time is wasted on paperwork.

Finally, where Gujarat really scores is on the corruption scorecard. “The entire system is so clean that nobody has to worry about greasing somebody's palm. This is a huge relief for most of us,” an auto sector executive said.

The general feeling within the industry is that this is going to be Gujarat's decade for auto investments. While most of the big global names have already established operations in India, the next big step is expanding capacities to meet demand both here and in overseas markets. And when there is a State willing to offer them some attractive fiscal sops, why turn it down?

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